A recent study by Boston Consulting Group reveals that cash still accounts for nearly 35% of transactions across the Middle East and Africa. Despite the rapid growth of digital payments, this creates a clear paradox:
You’re seeing rising consumer trust in online payments, yet cash on delivery continues to dominate.
To truly understand this contradiction, you need to analyze purchasing behavior tied to cash on delivery. In the Arab region, factors like trust, past experiences, and financial infrastructure all shape how your customers make decisions.
That’s why, at Middle East Commerce, you focus on connecting user behavior directly to conversion rates and profitability.
In this article, you’ll explore a data-driven breakdown of the risks of cash on delivery, how it impacts e-commerce growth, and the real reasons why it still persists.
Cash on Delivery in 2026: Numbers That Define Reality
Even with the expansion of digital payments, cash on delivery remains a major part of e-commerce in the region.
These numbers show you something important:
Your customers are constantly balancing convenience vs. trust.
Cash on Delivery (COD) Rate by Country (2020–2026)
Country | COD 2020 | COD 2023 | COD 2026 | Trend |
|---|---|---|---|---|
Saudi Arabia | 58% | 44% | 35% | ▼ Declining |
UAE | 45% | 32% | 22% | ▼ Declining |
Kuwait | 61% | 50% | 38% | ▼ Declining |
Qatar | 52% | 40% | 28% | ▼ Declining |
Jordan | 70% | 60% | 50% | ▼ Declining |
Bahrain | 48% | 36% | 25% | ▼ Declining |
Egypt | 80% | 72% | 67% | ▼ Slow decline |
How You Compare to Mature Markets?
According to Stripe:
In Germany, cash on delivery represents only 1%–3% of transactions
Consumers rely heavily on prepaid methods due to strong trust systems
In Poland (via Statista), digital and instant payments are rapidly replacing cash-based methods.
Meanwhile, in India (based on YourStory insights):
cash on delivery still accounts for 40%–45% of orders
Especially common among new users and smaller cities
But here’s the key insight for you:
While cash on delivery drives sales, it significantly increases returns and operational costs.
Why Cash on Delivery Hasn’t Declined Faster??
Data from FIS Global shows that digital payments in the Middle East are growing at double-digit rates annually. Yet cash on delivery still accounts for 30%–35% of transactions in several Gulf countries.
This means technology adoption does not automatically change behavior especially when trust and user experience are involved.
The key issue is the moment of decision. Many consumers still choose cash on delivery to reduce risk, especially with new stores or unfamiliar products. Other factors like informal return processes and fear of fraud also play a major role.
Learn more about: Repeat Purchases and Loyalty in the Online Store: Profit Strategies in 2026
5 Reasons Why Cash on Delivery Still Dominates
1. Fear of Online Fraud
Data from Mastercard shows over 50% of consumers prioritize security.
Even if your payment system is safe, perception matters more than reality.
That’s why cash on delivery feels safer.
2. Desire to Inspect Before Paying
A report by PayPal shows that nearly 40% of customers prefer to physically inspect products before paying.
This is why cash on delivery is still popular, especially in categories like fashion and electronics.
3. Negative Past Experiences
According to Baymard Institute, over 25% of users abandon stores after poor experiences with delivery or returns.
This pushes you to rely more on cash on delivery as a risk-reduction strategy.
4. Lack of Trust in Return Policies
Clear return policies can increase purchase rates by up to 20%, according to Shopify.
Without that clarity, you are more likely to choose cash on delivery.
5. Limited Credit Card Usage
Data from Visa shows uneven credit card adoption across demographics.
This keeps cash on delivery relevant, especially among older users or those less comfortable with digital payments.
Discover now: The Used Goods Market Statistics in the Gulf 2026
What You Actually Pay for Cash on Delivery?
While cash on delivery looks simple, it’s expensive.
How to Calculate the Cost of a Returned COD Shipment
According to DHL:
Returns can increase costs by 15%–30%
Example:
Shipping: 25 SAR
Return: 25 SAR
Total loss: 50 SAR (without revenue)
Delivery Rejection Rate by Industry
Sector | Rejection Rate | Average Loss |
|---|---|---|
Fashion | 15% – 25% | 45 – 65 SAR |
Electronics | 5% – 12% | 80 – 140 SAR |
Beauty | 10% – 18% | 35 – 55 SAR |
Furniture | 5% – 10% | 150 – 400 SAR |
What’s Driving the Decline of Cash on Delivery?
Digital Wallets
Solutions like Mada, STC Pay, Apple Pay, and EmaratPay are accelerating the decline of cash on delivery.
Buy Now, Pay Later (BNPL)
BNPL increases conversions by 20%–30% and directly competes with cash on delivery by reducing perceived risk.
Buyer Protection & Free Returns
When you offer clear guarantees, customers are less likely to choose COD.
COVID-19 Impact
According to McKinsey & Company, over 75% of consumers tried digital payments during COVID-19—and many continued using them.
How You Convert Cash on Delivery Users to Prepaid?
Offer Small Discounts
Even a 5% discount can shift behavior.
Use Trust Signals
Badges + reviews can increase conversions by 12%.
Simplify Checkout
One-click checkout can boost conversions by 20%–30%.
Use WhatsApp & SMS Confirmation
According to Meta:
Proactive messaging reduces rejection rates by 15%
Offer Installments
Installments increase conversions by 20%–25%.
Explore now: What Is The Customer Acquisition Cost And How Can You Reduce It in 2026?
When You Should Accept or Reject Cash on Delivery?
Criteria | Accept COD | Reject / Limit COD |
|---|---|---|
Order Value | Below 300 SAR | Above 500 SAR |
Product Type | Easy resale | Custom / fragile |
Customer History | New customer | Previous rejection |
Location | Major cities | Remote areas |
7 Smart Decisions You Should Make
Disable cash on delivery for high-value orders
Set a minimum order threshold
Exclude high-risk delivery areas
Limit COD to first-time customers
Add a small COD fee
Confirm orders via WhatsApp
Incentivize prepaid options
Middle East Platform: A Complete Ecosystem for E-Commerce and Digital Transformation
At the Middle East platform, you get an all-in-one e-commerce system that brings together operational and commercial tools in a single environment.
This allows you to manage your business more efficiently while reducing the complexity that comes from using multiple disconnected solutions.
The goal is to help you build a strong digital presence, with full support across sales, management, analytics, and expansion within the regional e-commerce market.
Store Creation and Management
You are provided with fully integrated tools to build and manage your online store easily. You can control products, pricing, and inventory while designing a storefront experience that fits your business model and enhances customer experience.
Order Management and Operations
The platform allows you to track the entire order lifecycle—from purchase to delivery. With a precise system for managing shipments and returns, you can reduce operational errors and improve execution efficiency, especially when handling cash on delivery orders.
Payment Solutions and Digital Marketing
The Middle East platform supports multiple payment methods tailored to different markets, helping you reduce reliance on cash on delivery.
You also get access to marketing tools that help you manage campaigns, improve product visibility, and increase conversion rates through better customer targeting.
Data Analytics and Growth Enablement
You gain access to advanced analytics and AI tools that help you understand customer behavior and store performance. This enables you to make data-driven decisions while scaling your business and entering new markets more effectively—even when optimizing strategies around COD.
FAQs About Cash on Delivery in the Arab Region
1. Why is cash on delivery still widely used in the Gulf despite digital payment growth?
Because of factors like trust issues, fear of online fraud, and the desire to inspect products before paying. In addition, some user segments still have limited access to or trust in digital payment tools, making cash on delivery a preferred option.
2. What is the rejection rate for cash on delivery orders?
The rejection rate varies by sector, typically ranging from 5% to 25%. It tends to be higher in fashion and accessories due to trial-based decisions, and lower in electronics where purchase intent is stronger.
3. When should you stop offering cash on delivery?
You should reduce or eliminate cash on delivery for high-value orders, low-margin products, or areas with high rejection rates—while keeping it limited and strategically controlled where necessary.
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